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On Monday, Citi analysts downgraded VF Corp (NYSE:VFC) shares from Buy to Neutral, significantly reducing the price target from $30.00 to $12.00. The decision reflects adjustments to the firm’s forecasts and growing concerns regarding the company’s ability to revitalize its Vans brand amid the current economic climate. According to InvestingPro data, VF Corp’s stock has declined over 41% in the past six months, with shares currently trading at $11.56.
VF Corp, known for its apparel brands including Vans, has been undergoing strategic changes, including the divestment of Supreme, which improved its balance sheet. Despite this, Citi notes that VF Corp remains relatively highly leveraged, with debt ratios of 3.0 to 3.9 times the newly estimated EBITDA for fiscal years 2026 and 2027 and $530 million in debt due in March 2026. InvestingPro data shows the company maintains a current ratio of 1.56, indicating sufficient liquid assets to meet short-term obligations, though its debt-to-equity ratio stands at 3.42.
Citi has also revised its earnings estimates for VF Corp, lowering the forecast for fiscal years 2026 and 2027 from $1.43 and $1.74 per share to $0.77 and $0.70, respectively. The new projections account for anticipated lower sales and increased product costs, which are expected to be driven by tariffs, although partially offset by reductions in selling, general, and administrative expenses (SG&A).
The sales outlook for VF Corp has been adjusted to a decrease of 0.6% for fiscal year 2026, a sharp contrast to the previously expected increase of 1.8%. Additionally, the EBIT margin is projected to contract by 20 basis points to 5.5%. For fiscal year 2027, sales growth projections have been tempered to 0.9% from the earlier 2.6%, with an expected EBIT margin reduction of 70 basis points to 4.8%.
This revision in VF Corp’s price target to $12.00 is based on the lowered forecast and the anticipated challenges the company faces in its operations and market performance.
In other recent news, VF Corporation announced the appointment of Abhishek Dalmia as Executive Vice President and Chief Operating Officer. Dalmia will oversee corporate strategy, digital technology, and supply chain operations, with a compensation package that includes a base salary of $800,000 and additional incentives. Meanwhile, the company’s board underwent a reshuffle following the resignation of director W. Rodney McMullen, reducing the board size from thirteen to twelve directors. On the analyst front, Stifel maintained a Buy rating on VF Corp shares with a $35 price target, citing potential growth in The North Face and Timberland brands as key factors. Conversely, Jefferies adjusted their price target for VF Corp to $23 from $24, maintaining a Hold rating and expressing concerns about the timing of sales growth for the Vans brand. These developments occur as VF Corp continues to focus on strategic growth and market presence in the competitive apparel industry.
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